EconomyxAI · Sector Watch January 2013Released January 16, 2013 |
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Conditions index +0.32 avg of 11 sectors, −2 to +2 |
| Outlook index +0.13 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | Released January 16, 2013, with information collected on or before January 4, 2013. | | ■ | All twelve districts described growth as modest or moderate; New York and Philadelphia rebounded from Hurricane Sandy and Boston, Richmond and Atlanta picked up slightly. | | ■ | Consumer spending grew in all districts with holiday sales modestly above 2011 but below expectations in many; tourism increased and manufacturing was mixed. | | ■ | Residential real estate expanded broadly with rising prices, loan demand steady to stronger, oil and gas high but coal weaker, and prices and wages stable. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▶ Steady | +0.49 |
| Financials
XLF
▲ Turning up | +0.37 |
| Industrials
XLI
▲ Turning up | +0.31 |
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| Weakest prospects Health Care
XLV
▶ Steady | −0.04 |
| Materials
XLB
▼ Weakening | −0.02 |
| Utilities
XLU
▶ Steady | +0.01 |
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All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
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| 1 | Real Estate
XLRE | | +0.49 | Leaning Favorable | +0.93 | +0.53 | ▶ +0.00 | | 2 | Financials
XLF | | +0.37 | Leaning Favorable | +0.57 | +0.50 | ▲ +0.40 | | 3 | Industrials
XLI | | +0.31 | Leaning Favorable | +0.23 | +0.46 | ▲ +0.34 | | 4 | Information Technology
XLK | | +0.29 | Leaning Favorable | +0.47 | +0.00 | ▲ +0.64 | | 5 | Consumer Discretionary
XLY | | +0.29 | Leaning Favorable | +0.80 | −0.06 | ▲ +0.42 | | 6 | Energy
XLE | | +0.20 | Leaning Favorable | +0.65 | −0.04 | ▲ −0.06 | | 7 | Consumer Staples
XLP | | +0.04 | Neutral | +0.07 | +0.00 | ▶ +0.10 | | 8 | Communication Services
XLC | | +0.01 | Neutral | +0.00 | +0.00 | ▶ −0.02 | | 9 | Utilities
XLU | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Materials
XLB | | −0.02 | Neutral | −0.11 | +0.00 | ▼ −0.33 | | 11 | Health Care
XLV | | −0.04 | Neutral | −0.06 | +0.00 | ▶ −0.12 |
Prospect Score blends current conditions, district outlooks, momentum, a sector-specific macro tilt and margins. Now = weighted current conditions; Outlook = n/a when too few districts gave one; Mom. = change vs the average of the two prior releases. |
National Summary, scored −2 to +2 Macro backdrop | Overall Economic Activity | | +0.50 |
All twelve districts modest or moderate; storm-hit districts rebounded. | Labor markets mostly unchanged; hiring delayed by fiscal cliff uncertainty. | | Inflation Pressure (higher = headwind) | | +0.00 |
Input prices steady; construction materials rising. | Loan demand steady or stronger; quality improving; some loosening. | Outlooks slightly dimmer for consumers but manufacturers optimistic. |
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Current conditions in each Fed district District by sector | BOS | NY | PHL | CLE | RIC | ATL | CHI | STL | MIN | KC | DAL | SF |
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| Information TechnologyXLK | · | · | · | · | · | · | · | · | · | · | · | +1 | | Health CareXLV | +1 | · | · | · | +1 | · | · | · | · | · | · | −1 | | FinancialsXLF | · | +1 | +1 | · | · | +1 | +1 | −1 | · | +1 | +1 | · | | Consumer DiscretionaryXLY | +1 | +1 | +1 | +1 | · | +1 | · | +1 | +1 | · | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | · | +1 | −1 | +1 | −1 | +1 | −1 | +1 | −1 | · | +1 | | Consumer StaplesXLP | · | · | · | · | +1 | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | −1 | +1 | −1 | +1 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +2 | · | +1 | +1 | +1 | +1 | +1 | +1 | +2 | +1 | +1 | +1 | | MaterialsXLB | +1 | · | · | · | · | · | · | · | −1 | −1 | · | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Real Estate +2 Boston, Minneapolis Strong year-over-year growth in sales; prices rising. Why it matters: Strongest Real Estate reads. | Real Estate +1 broad−based Broad-based Existing residential real estate expanded in all reporting districts. Why it matters: Breadth lifts Real Estate. | Consumer Discretionary +1 broad−based Broad-based Consumer spending increased in all twelve districts; auto sales steady or stronger. Why it matters: Discretionary positive. | Financials +1 New York, Atlanta, Chicago, Dallas Stronger loan demand. Why it matters: Financials positive. | Information Technology +1 San Francisco Strong sales of newer hardware and technology services. Why it matters: SF carries 47% of IT weight. | Industrials −1 Cleveland, Atlanta, St. Louis, Kansas City Manufacturing declined somewhat. Why it matters: Restrains Industrials. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▶ Continues to grow modestly. |
| New York Growing +0.5 Outlook ▲ Rebounding after Sandy. |
| Philadelphia Growing +0.5 Outlook ▲ Resumed modest growth. |
| Cleveland Growing +0.5 Outlook ▼ Expanded at a modest pace. |
| Richmond Growing +0.5 Outlook ▶ Grew at a modest pace. |
| Atlanta Growing +1.0 Outlook ▲ Expanded moderately. |
| Chicago Growing +0.5 Outlook ▶ Continued to expand at a slow pace. |
| St. Louis Growing +0.5 Outlook ▶ Grown at a modest pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Growing +0.5 Outlook ▶ Expanded modestly. |
| Dallas Growing +0.5 Outlook ▶ Expanded at a modest pace. |
| San Francisco Growing +0.5 Outlook ▶ Expanded at a modest pace. |
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Where the signal is thin or split Divergences to watch | Real Estate — Broad gains with two +2 reads lift the sector; weighted and unweighted similar.
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| | Health Care — San Francisco (-1) offsets Boston and Richmond gains.
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How to read this. Each Fed district’s report is scored −2 (strong contraction) to +2 (strong expansion) for each GICS sector, then weighted by the district’s share of that sector’s activity. The Prospect Score blends current conditions (25%), district outlooks (35%), momentum (20%), a sector-specific macro tilt (10%) and margin pressure (10%). The Beige Book describes regional activity, not earnings or valuations. Weights and sensitivities are illustrative. This newsletter is for information only and is not investment advice. Source: Federal Reserve Beige Book · Scored by EconomyxAI |